Friday, May 27, 2011

The AUR and the Super Carrier

With the coming of micro-transactions to New Eden, I now understand CCP Greyscale's reluctance to take action against the over-powered supercapital class of ships.

It's all about the AUR.

In their latest devblog posting CCP announced how micro-transactions will work in Eve Online.

To break it down:

You pay in AUR for Vanity items (i.e. clothes/accessories for your avatar or that alliance insignia and paint job for your ship)

AUR can only be bought by redeeming PLEX

Vanity items can be resold in game after their initial purchase, but only for ISK

"But Mord," you might ask, "Why do we need a new currency? Why can't I simply buy vanity goods directly with ISK and be done with it? And what does this have to do with supercapitals?"

I'm glad you asked that. You're being particularly insightful today. Bear with me, this is going to be a slightly round-about trip.

See, the need to use PLEX to buy AUR creates a new, secondary market for the PLEX.

Up until now, PLEX were reimbursed in place of paying directly for a subscription. A purchased PLEX entered the system and, in theory, didn't leave the system until it was reimbursed for play time or used as a donation.

Now, recall back in January when in The Coming Super Carrier Buff I expressed puzzlement over CCP Greyscale's uncharacteristic concern for Super Carrier pilots in the event their wildly overpowered ships were brought back into balance.

CCP Greyscale seems strangely resistant to the idea of reducing the Super Carriers utility out of apparent concern for the lot of Super Carrier pilots. Simply nerfing Super Carriers, Greyscale said, "imposes a great cost on [Super Carrier] pilots".

Now that's a bit strange.

In imposing nerfs on various ships over the years CCP's policy over the years has been to put the health of the game over the interests of pilots of a class of ship than had gotten out of balance. Investing heavily in any overpowered ship or technology has always been a calculated risk in New Eden, as such ships are routinely targeted by CCP for re-balancing. We are all aware that, unlike Star Trek's Scotty, CCP can change the laws of physics on you.

I suggested at the time that there might be a profit motive behind Greyscale's sudden empathy for pilots of a particular ship class. After all, I pointed out, if the ISK needed to finance supercapitals and the expensive modules and implants needed for them are being bought via PLEX, that's money in the bank for CCP. In that case, CCP Greyscale would every reason for keeping Super Carriers and Titans the overpowering, 'must have' ship they remain today.

Some of you, like the Sage of Canada, Kirith Kodachi, correctly pointed out that, in theory, the transaction should be a wash for CCP.

"That nets out to about $700 US worth of Plex purchases to buy a bargain-basement priced Nyx in-game. [...] That, my friends, is money in the bank for CCP assuming those ISK are bought through CCP's Plex program."

But those purchased PLEXes can only be used for paying for someone's game time. Thus that 700 dollars replaced someone else's 700 dollars of subscription fees. The only way CCP makes money is if the PLEX are destroyed.

Now PLEX can be destroyed.

Under CCP's new micro-transactions scheme, a PLEX used for AUR exits the system. It cannot be used to purchase game time.

Mind, even before the AUR, CCP was making money on PLEX purchases. But that was money at the margins; PLEX languishing in the in-game speculation market, or keeping subscribers unable to pay in cash in the game.

With AUR, CCP finally has a true PLEX sink that costs CCP next to nothing. When a PLEX is burned for AUR it exits the game and CCP's balance sheets will reflect it as almost pure profit.

Now, notice in the dev blog announcement that CCP Zulu says they will monitor the PLEX market to make sure it doesn't get out of control. This probably means that CCP intends to inject PLEX into the system if their price gets too high or buy up PLEX if the market gets flooded and the price crashes. This is the sort of mechanism a government might use to control inflation or deflation in a market economy and the sort of move I'd expect Dr. E to push.

This is good for you, because it ensures the price of a PLEX won't go completely out of sight. However, it also ensures you won't get crazy-wild discounts on PLEX either. It is exceptionally good for CCP in either event, because it allows them to maintain the PLEX market at a level that ensures an optimal flow of PLEX purchases.

CCP is a for profit company. When CCP Greyscale suddenly breaks pattern and begins to act out of character, a for profit motive is the likely diagnosis.

"But those purchased PLEXes can only be used for paying for someone's game time. Thus that 700 dollars replaced someone else's 700 dollars of subscription fees. The only way CCP makes money is if the PLEX are destroyed."

This statement is incorrect.

$700 of plex pays for someone's game time. HOWEVER the player who bought the PLEX to put ingame still has to pay their sub. Every single subscriber pays their account with real money in some form.

"This probably means that CCP intends to inject PLEX into the system if their price gets too high or buy up PLEX if the market gets flooded and the price crashes."

If true, the implications go further than simply maintaining an optimal price. Assuming CCP 'buying up' PLEX from the market actually entails removing a quantity of PLEX from circulation entirely rather than simply purchasing them to re-sell when the market recovers, this becomes another avenue by which CCP can effectively destroy plex.

Back in the old days, how much would someone pay in real money for a really cool outfit in Second Life? $5? That's what, 100 million ISK? Selling 100 million ISK outfits is just silly.

CCP has devised this system to allow them to sell clothes for as much real money as you'd spend for battleships without creating pervasive reality-breaking absurdity.

CCP plans to make a lot of money *selling clothes*. If that plan works -- if hundreds of thousands of people will pay a subscription fee AND pay for cool clothes, etc., they'll make a ton of money. If not, they won't. The effects you're describing are relatively minor.

If this works, there will be a heck of a lot more fashion victims than supercap pilots.

if the ISK needed to finance supercapitals and the expensive modules and implants needed for them are being bought via PLEX.

Just using the supercapital pilots I know as a baseline, that's a very, very big "if". Everyone I know who has a super carrier has paid for it using ISK earnt in game. In fact they're generally suitably space rich that they pay for their accounts with ISK too. I know that's from an old post but I think your connection here is flawed. Also my connections are limited and I don't know any NC supercapital pilots but I just felt the need to point this out.

ISK sinks in Eve are a good thing and, to be honest, vanity items could well turn out to be the best of them all. At the end of the day I think the ISK/PLEX market will balance itself out in the nice 3-way between ISK/PLEX, AUR/PLEX, and ISK/AUR.

CCP Greyscale seems strangely resistant to the idea of reducing the Super Carriers utility out of apparent concern for the lot of Super Carrier pilots. Simply nerfing Super Carriers, Greyscale said, "imposes a great cost on [Super Carrier] pilots".

At the same time, he's also said: ">> Yeah, supercarriers in particular just flat-out need a nerf, I think this is obvious to everyone. We'll give plenty of warning, but don't be surprised when it happens." - http://www.eveonline.com/ingameboard.asp?a=topic&threadID=1508537&page=2#38

Tsubutai - CCP Greyscale has been agreeing that supercaps are nerf-worthy for some time. He was talking that line six month ago. Talk is cheap. Whiskey costs money. I imagine there will be a nerf, though likely not in the next two quarters. Even then I suspect the nerf will not be the re balancing needed and will be accompanied by other nullsec changes that off-set the nerf. If it is in CCP's financial interest to keep the market for supercaps jumping, jump it will.

Trust me they will not nerf the Super Carriers until they have another 'must have' ship that alliances will be using in the ever present arms race. I am thinking something along the lines of t2 carriers or t2 dreads, Dare I say eve t2 Super carriers? for the time being they will not kill their cash cow.

"This probably means that CCP intends to inject PLEX into the system if their price gets too high or buy up PLEX if the market gets flooded and the price crashes. This is the sort of mechanism a government might use to control inflation or deflation in a market economy and the sort of move I'd expect Dr. E to push."

At Fanfest, Dr. E actually said he was going to monitor the PLEX market and intervene if necessary.

I do expect that the mechanisms for injecting PLEX into the market and buying them up in order to protect the program from wild price swings has been in place for some time and we're just hearing about the intervention policy now.

Anything forth coming on the NC situation? I see TEST has reset the NC along with their renters/pets. I've heard UMI is now being contested. I've heard Majesta have decided to look for greener pastures.

Seems like things are looking grim for the NC. Plus, I've even heard of an impending tech nerf rumors. That is going to hurt too.